COLA
| 2022 | 2023 | 2024 | |
|---|---|---|---|
| Maximum Taxable Earnings | |||
| Social Security (OASDI only) | $147,000 | $160,200 | $168,600 |
| Medicare (HI only) | No Limit | ||
| Quarter of Coverage | |||
| $1,510 | $1,640 | $1,730 | |
| Retirement Earnings Test Exempt Amounts | |||
| Under "full retirement age" | $19,560 / yr | $21,240 / yr | $22,320 / yr |
| ↪ NOTE: For every $2 in earnings beyond the cap, one dollar in benefits will be withheld. | |||
| The year a person achieves their "full retirement age." | $51,960 / yr | $56,520 / yr | $59,520 / yr |
| ↪ NOTE: Only pertains to income earned in the months before reaching the full retirement age. For every $3 in earnings beyond the cap, one dollar in benefits will be withheld. | |||
| The month that a person reaches "full retirement age." | None | ||
| Social Security Disability Thresholds | |||
| Non-Blind | $1,350 / mo | $1,470 / mo | $1,550 / mo |
| Blind | $2,260 / mo | $2,460 / mo | $2,590 / mo |
| Trial Work Period (TWP) | $970 / mo | $1,050 / mo | $1,110 / mo |
| Maximum Social Security Benefit: Worker Retiring at "Full Retirement Age." | |||
| $3,345 / mo | $3,627 / mo | $3,822 / mo | |
| SSI Federal Payment Standard | |||
| Individual | $841 / mo | $914 / mo | $ 943 / mo |
| Couple | $1,261 / mo | $1,371 / mo | $1,415 / mo |
| SSI Resource Limits | |||
| Individual | $2,000 | $2,000 | $2,000 |
| Couple | $3,000 | $3,000 | $3,000 |
| SSI Student Exclusion | |||
| Monthly limit | $2,040 | $2,220 | $2,290 |
| Annual limit | $8,230 | $8,950 | $9,230 |
| *aforesaid table data came from "ssa.gov/news/press/factsheets/colafacts2024.pdf" and "ssa.gov/news/press/factsheets/colafacts2023.pdf". | |||
Keeping “Social Security benefits and SSI payments” purchasing power intact against inflation is the goal of the “cost-of-living adjustment” (COLA). Annual calculations are used to determine the COLA.
For the majority of beneficiaries who have a “my Social Security” account, Social Security always begins posting COLA announcements online in December through the account’s “Message Center.” For sign-in or sign-up, visit — “ssa.gov/myaccount”. To be informed when your new benefit amount becomes available, choose your “message preferences” (text or email) after logging in.
Recall that COLA notification services are provided without cost. By not “disclosing personal information, clicking on dubious links, or opening dubious attachments,” you can prevent falling for scam calls and online “phishing” operations. For security related information, visit — “ssa.gov/myaccount/security.html”.
The comparison of the average CPI-W for the third calendar quarter of the current year with the “average CPI-W for the third calendar quarter of the ‘previous year’ (a COLA was determined)” is what determines the COLA. The “percentage increase” that follows, if any, is the percentage that will be consumed to raise “Social Security benefits” starting in December of the current year. And in the following month (January), SSI increases by the same proportion.
There will be a “COLA” (adjustment) if the CPI-W increases by at least 0.1 percent. Nonetheless, there won’t be a COLA if the CPI-W falls or “rises by less than 0.05 percent.”
Based on the experience of the relevant typical household (a survey of 7,000 households’ spending patterns), CPI-W (and CPI-U) is calculated.
The “Social Security Amendments” of 1972 included a clause/provision on COLA that Congress passed, and automatic yearly “COLAs” (adjustments) started in 1975. Benefits were only enhanced prior to then by “special legislation” passed by Congress.
COLAs raise the “monthly benefit payment” average as well as the maximum when appropriate. Yet, for those who receive both “OASDI and SSI benefits” concurrently, increases in SSI benefits are somewhat offset by increases in Social Security benefits brought on by the same COLA. In the “SSI program,” Social Security benefits are treated as income. As a result, in the computation of SSI payments “any rise in Social Security benefits brought about by the annual COLA” raises countable income.
Schemes “amounts” which vary according to the COLA are as follows: benefits under Title II (Retirement, Survivors or Disability); benefits under Title VIII (certain World War II Veterans); benefits under Title XVI (SSI for the Aged, Blind, and Disabled); the student earned income exclusion; the fee for services rendered by a representative payee; and “the appointed representative fee assessment.”
How COLA? -
A formula for calculating the percentage change in CPI-W between the current and “previous year” (COLA effective) is specified by the Social Security Act. If the percentage change is positive then it is worth considering.
Percentage Change = ((CPI-W_current_year − CPI-W_last_effective_year) ÷ CPI-W_last_effective_year)×100.
| CPI-W | ||
|---|---|---|
| 2022 | 2023 | |
| July | 292.219 | 299.899 |
| August | 291.629 | 301.551 |
| September | 291.854 | 302.257 |
| Third quarter total | 875.702 | 903.707 |
| Average (rounded to the nearest 0.001) | 291.901 | 301.236 |
2022 was the last year in which a COLA was effective. Thus, according to the table, the average “CPI-W for the third quarter” (base) of 2022 is 291.901 (875.702÷3).
For the third quarter of 2023, the average CPI-W is 301.236 (903.707÷3).
The COLA in effect for December 2023 is “3.2 percent” (> 0.1) due to the 2023 average’s “3.2 percent excess over 2022 (291.901).”
((301.236 – 291.901) ÷ 291.901) x 100 = 3.2 percent.
Official COLA Link: https://www.ssa.gov/cola/
That’s all friends.
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